Virgin Islands' Refinery to Install $700M Worth of Pollution Controls

Hovensa LLC also will pay more than $5.3 million to settle Clean Air Act violations; EPA estimates smog and asthma-causing emissions will be reduced by 8,500 tons per year.

Jan 27, 2011

The U.S. Environmental Protection Agency and the U.S. Department of Justice have announced that Hovensa LLC, owner of the second largest petroleum refinery in the United States,has agreed to pay a civil penalty of more than $5.3 million and spend more than $700 million in new pollution controls that will help protect public health and resolve Clean Air Act violations at its St. Croix, U.S. Virgin Islands refinery.

The settlement requires new and upgraded pollution controls and more stringent emission limits as well as aggressive monitoring, leak-detection, and repair practices to reduce emissions from refinery equipment and process units.

The government’s complaint, filed concurrently with the settlement, alleged that the company made modifications to its refinery that increased emissions without first obtaining pre-construction permits and installing required pollution control equipment. The Clean Air Act requires major sources of air pollution to obtain such permits before making changes that would result in a significant emissions increase of any pollutant.

Once fully implemented, the pollution controls are estimated to reduce emissions of nitrogen oxides by more than 5,000 tons per year and sulfur dioxide by nearly 3,500 tons per year. The settlement also will result in reductions of volatile organic compounds, particulate matter, carbon monoxide, and other pollutants that affect air quality. Additional pollution-reducing projects at the refinery’s coking unit under the settlement will also reduce greenhouse gas emissions by more than 6,100 tons per year.

The government of the U.S. Virgin Islands has joined in the settlement and will receive a portion of the civil penalty. The company also will set aside nearly $4.9 million for projects to benefit the environment of the U.S. Virgin Islands. The projects will be identified jointly by the U.S. Virgin Islands government and Hovensa, in consultation with EPA.

The settlement with Hovensa is the 28th under an EPA initiative to improve compliance among petroleum refiners and to reduce significant amounts of air pollution from refineries nationwide through comprehensive, company-wide enforcement settlements. The first of EPA’s settlements was reached in 2000, and with this settlement, 105 refineries operating in 32 states and territories – more than 90 percent of the total refining capacity in the United States – are under judicially enforceable agreements to significantly reduce emissions of pollutants. As a result of the settlement agreements, refiners have agreed to invest about $6 billion in new pollution controls designed to reduce emissions of sulfur dioxide, nitrogen dioxide and other pollutants by over 360,000 tons per year.

Hovensa is one of the 10 largest refineries in the world and has the capacity to refine more than 525,000 barrels of crude oil per day.The consent decree, lodged in the District Court of the Virgin Islands, is subject to a 30-day public comment period and court approval.